Wnt and Hedgehog signaling pathways play central roles in embryogenesis, stem cell maintenance, and tumorigenesis. However, the mechanisms by which these two pathways interact are not well understood. Here, we identified a novel mechanism by which Wnt signaling pathway stimulates the transcriptional output of Hedgehog signaling. Wnt/β-catenin signaling induces expression of an RNA-binding protein, CRD-BP, which in turn binds and stabilizes GLI1 mRNA, causing an elevation of GLI1 expression and transcriptional activity. The newly described mode of regulation of GLI1 seems to be important to several functions of Wnt, including survival and proliferation of colorectal cancer cells. Cancer Res 2009;69(22):8572–8